City: Developer Must Pay Extra Cost

KISSIMMEE — Telling the developer that his word is his bond, city commissioners held firm this week on an agreement involving about $200,000 in construction cost overruns at the Osceola Square Mall.

In a 3 to 2 vote Tuesday night, commissioners denied developer Norman Rossman's request to scale down the project rather than his paying the difference between the $804,300 it will cost and the $596,600 available from a federal jobs grant.

However, commissioners agreed to Rossman's request that the city ask the state Department of Transportation to install a traffic signal at Armstrong and Vine streets. However, if the state refuses, Rossman still must pay for it.

''It's a tough pill to swallow, but he's going to have to swallow it,'' Commissioner Jimmy Wells said. ''I think he bit the bullet -- however unfortunate the bullet was -- and made a commitment. I know it's a lot of money, but it's a lot of project.''

The city obtained the $749,680 grant late last year to build streets, water and sewer lines and install traffic lights at the mall site. Of that amount, $596,600 is available for construction, while the balance will cover administrative, engineering and inspection costs.

Under the terms of the project's contract proposal, Rossman agreed to pay for any construction costs above the grant. However, when he learned that the lowest bid on the project was $804,300, the developer balked.

''It's not so much sour grapes as (the overrun being) far beyond the expectation of Mr. Rossman,'' Jim Willard, the developer's attorney, told commissioners at the meeting. ''We did commit to fund a deficiency; however, we did not anticipate that fully 20 percent of the jobs grant would not be available.''

Willard asked the commissioners to consider scaling down the project by some $20,000. Specifically, he wanted to delay the installation of a traffic signal at the corner of Columbia and Armstrong.

Willard also asked that the city request the DOT pay $30,000 for a traffic signal at Armstrong and Vine when the state widens Vine next year.

Furthermore, Willard asked the city to make property owners adjacent to the shopping center share in the cost of paving Columbia between Armstrong and Dyer. That would save Rossman another $100,000 for a total of $150,000. Willard said Rossman then would pay the remaining cost overrun.

However, commissioners held the developer to his word, turning down everything except contacting the DOT.

''He was just trying to save a few bucks,'' said Commissioner Bruce Van Meter, who voted to make Rossman pay the overrun. ''You can't blame a businessman for doing that, but in this case I don't think he needs to be let off the hook.''

City Manager A.B. Preston -- who recommended to commissioners that Rossman pay the difference -- said if the city had not received the grant, Rossman would have had to pay the entire cost of the project.

However, Assistant City Manager Bob Berlinsky said Rossman would not have been required to pave Columbia between Armstrong and Dyer streets. However, Berlinsky said, since Rossman promised in the grant's development contract to include paving Columbia, he should pick up the cost.

At least three of the commissioners agreed.

Van Meter said paving Columbia ''is definitely a plus'' for the mall after it opens because it will make entering the shopping center easier.

Mayor George Gant and Commissioner Naomi Winbush voted against the resolution. Gant said he favored letting Rossman split assessment costs.